(CNN) - President Obama urged Congress to quickly pass a credit card reform bill so that he can sign it into law by Memorial Day.
“It is past time for rules that are fair and transparent,” the president said in his weekly radio address.
“Instead of an ‘anything goes’ approach, we need strong and reliable protections for consumers. Instead of fine print that hides the truth, we need credit card forms and statements that have plain language in plain sight, and we need to give people the tools they need to find a credit card that meets their needs. And instead of abuse that goes unpunished, we need to strengthen monitoring, enforcement, and penalties for credit card companies that take advantage of ordinary Americans,” he said.
While Americans have a responsibility to live within their means, they also have “a right to not get ripped off” by rate hikes, penalties and hidden fees, Obama said.
“You shouldn’t have to fear that any new credit card is going to come with strings attached, nor should you need a magnifying glass and a reference book to read a credit card application,” he said.
The House has already passed a bill targeting credit card rate hikes and fees, and the Senate is expected to vote on its version of the measure in the coming week.
Obama said there are some signs that the economy is recovering, but “we are still in the midst of a deep recession that was years in the making, and it will take time to fully turn this economy around.”
“We need a durable and successful flow of credit in our economy, but we can’t tolerate profits that depend upon misleading working families. Those days are over,” he said.
Full transcript after the jump
Remarks of President Barack Obama
Good morning. I want to briefly share some news about our economy, and talk about the work that we’re doing both to protect American consumers, and to put our economy back on a path to growth and prosperity.
This week, we saw some signs that the gears of America’s economic engine are slowly beginning to turn. Consumer spending and home sales are stabilizing. Unemployment claims are dropping and job losses are beginning to slow. But these trends are far from satisfactory. The unemployment rate is at its highest point in twenty-five years. We are still in the midst of a deep recession that was years in the making, and it will take time to fully turn this economy around.
We cannot rest until our work is done. Not when Americans continue to lose their jobs and struggle to pay their bills. Not when we are wrestling with record deficits and an over-burdened middle class. That is why every action that my Administration is taking is focused on clearing away the wreckage of this recession, and building a new foundation for job-creation and long-term growth.
This past week, we acted on several fronts. To restart the flow of credit that businesses and individuals depend upon, we completed an unprecedented review of the condition of our nation’s largest banks to determine what additional steps are necessary to get our economy moving. To restore fiscal discipline, we identified 121 programs to eliminate from our budget. And to restore a sense of fairness to our tax code and common sense to our economy, I have asked Congress to work with me in closing the loopholes that let companies ship jobs and stash profits overseas – reforms will help save $210 billion over the next ten years.
These important steps are just one part of a broad effort to get government, businesses and banks to act more responsibly, so that we are creating good jobs and making sound investments instead of spending recklessly and padding false profits. Because American institutions must act with the same sense of responsibility and fairness that the American people aspire to in their own lives.
Nowhere is this more apparent than in our credit card industry. Americans know that they have a responsibility to live within their means and pay what they owe. But they also have a right to not get ripped off by the sudden rate hikes, unfair penalties, and hidden fees that have become all-too common in our credit card industry. You shouldn’t have to fear that any new credit card is going to come with strings attached, nor should you need a magnifying glass and a reference book to read a credit card application. And the abuses in our credit card industry have only multiplied in the midst of this recession, when Americans can least afford to bear an extra burden.
It is past time for rules that are fair and transparent. That is why I have called for a set of new principles to reform our credit card industry. Instead of an “anything goes” approach, we need strong and reliable protections for consumers. Instead of fine print that hides the truth, we need credit card forms and statements that have plain language in plain sight, and we need to give people the tools they need to find a credit card that meets their needs. And instead of abuse that goes unpunished, we need to strengthen monitoring, enforcement, and penalties for credit card companies that take advantage of ordinary Americans.
The House has taken important steps toward putting these principles into law, and the Senate is poised to do the same next week. Now, I’m calling on Congress to take final action to pass a credit card reform bill that protects American consumers so that I can sign it into law by Memorial Day. There is no time for delay. We need a durable and successful flow of credit in our economy, but we can’t tolerate profits that depend upon misleading working families. Those days are over.
This economic crisis has reminded us that we are all in this together. We can’t prosper by putting off hard choices, or by protecting the profits of the few at the expense of the middle class. We are making steady progress toward recovery, but we must ensure that the legacy of this recession is an American economy that rewards work and innovation; that is guided by fairness and responsibility; and that grows steadily into the future.
This is the most comical statement from the transcript: “You shouldn’t have to fear that any new credit card is going to come with strings attached".......haha, you mean like all the string attached to the TARP money that banks don't want but you are forcing down their throats obama?????
You can absolutely bet that the Republican leaders will attempt to delay or kill it in order to protect the privileges and profits of the credit card companies.
Who does this benefit most. People who pay their bills on time, play by the rules, take the lessons of life seriously, not live beyond their means.....who???? We all know this is pandering to constituants not policy that is practical or enforcable without government bullying. Who doesnt read the terms before signing up. Who doesnt know that credit cards creat more problems than they ever cure. The irresponsible will always be irresponsible but victims go on forever. I MAKE MY OWN DEBTS AS MUCH AS I PREFER NOT TO PAY FOR ANY OTHERS!!! THATS A STRANGE CONCEPT IN AMERICA THESE DAYS!!!
If many Americans could live within their means they would, but simply the cost of living for a single person with an ordinary full-time job is too much for one person, so when divorce, job loss, or other hardships occur it becomes very difficult for Americans to make ends meet. Though credit cards help people get by, debt can aquire easily, interest rates increase, and it becomes a viscious cycle. It is very difficult to find a part-time job to go with a full-time job. The system makes it difficult for honest Americans to make a living to where they can live within their means. The problems lie outside of credit cards sometimes. An honest person who wants to work should be given a chance. Companies don't want to bother working around another schedule or they are afraid another job will get in the way. It is not easy for singles these days. Give us jobs. Work with us. I see a problem with companies not giving people the chance to make a living, which is one reason some people need credit cards. It is not always that they are irresponsible. They have to make a living.
pres. obama is 100 percent right...these greedy credit card companies are sucking the blood of poor and needy people by charging outrageosly...look 19.78% interest rate.....when you open CD you get only 1.45% for 12 month....where is justice...Pres. Obama, I will vote for you for next election....I say with confidence...god bless our nation, the USA!!!!!!kishen c.rao
This is something I fully support. I have always paid my credit cards on time yet recently the card companies have jacked up my rates 2-5% for no reason. They even increased my balance. I have a near perfect credit score. Why am I being punished for carrying a balance?
from loan sharks of wall street!
people will gladly pay our own bank a lower interest rate!
Yes, the credit card companies and business in general are impatient to cover their losses and turn unusually high profits killing the recovery and forcing a return to the credit laden ways which caused our meltdown!!! America must rebel against greed and insist upon quality products and services and a cash oriented economy for lasting recovery and insurance against another meltdown. Patience and integrity must be America's new mantra!!!
Thank you President Obama for looking out for average Americans instead of putting big business first.
I'm sure this man will run my country like he ran his presidential campaign! Outstandingly! And that's my PRESIDENT! My children's future looks GREAT!
Oh, I agree... as well as the mortgage companies! Something has to be done with these leaches who are draining the American Public! They have preyed on us like parasites... and they continue to do so despite all the tax money that has been pumped into their failing companies... now there is NO mercy for the very victims they have created! If a bank or loaning institution checks your credit and says you are qualified... there are those out there who believe them. And now as the economy bottoms out they are losing their butts, but NOT the banks and loaning institutions.
I know. My credit card companies have all tried to jack up my interest rates even though I have consistently paid on time. Our tax money is helping to keep them alive, and they are ripping us off. Something seems unequal there
To hell with all the fat kat,the crook bank ceo your days are #,now we finally got someone looking after the poor mr.president go get dem,and i can't wait to vote for you in 2012
Let’s see, the government owns the banks, the auto industry, and now the credit card companies. Next steps are health care, gun control, and education. One step at a time and you sheep still don't see what's coming...
I agree that the credit card companies can be scam artists. They will double your interest rates just when you need the credit the most. The major problem though is not with the credit card companies, just like it isn't with the banks, car manufacturers, or mortgage lenders. We the People seem to think that we are all entitled to everything we want and everything that everyone else has. Whether we can afford it or not. Our grandparents did not live on credit. When we borrow from banks by mortgage, credit cards, or loans, we go into a contract. This is by choice. Most of us have made financial mistakes. By putting the burden on "bail outs" to remedy the situation, no one learns anything. The bad guy is in the mirror. How many times will we have to learn this lesson? Viva la depression. We need it!
This is one issue that I agree with this sorry sack of a president. Good call Obama. Too bad you are a traitor to this Nation and our Founding Fathers!
This is the first Obama action I support. If he gets more to the middle I will supprt him more.
Of course there's no time to delay, credit card issuers NEVER delay to jack up their interest rates, terms, lower available balances.
And usually they announce it after the fact, or better yet, you just get surprised. Now, they WILL howl about the change to come. And probably send armies of lobbyists to squash any change to their cash cows. Can't come fast enough for most people.
I say AIM and FIRE forget the get ready. The bank credit card business is a loan sharking business aimed at the least able among us, nothing more. If it tightens up credit, well some of us are better off not getting into the debt cycle owing our souls to bankers.
How about creating a fine print for financial firms that covers
– If, at anytime, the public find your T&Cs a ripoff, we will strip all top executives' compensation retroactively and including their (former/current) relatives' possession that came from their (execs') compensation?
BTW, letting Madoff's wife (former/current/future?) keep her property is a crime! There are no ifs or buts about this!
– If, at anytime, the public finds your T&Cs a ripoff, we will strip all top executives' compensation retroactively and including their (former/current) relatives' possession that came from their (execs') compensation?
I love the use of the word "transparent". Credit card company's are transparent, granted you need a magnifying glass to read them. But thats more than this administration and any other has ever been with Americans.
This will cut off credit to less qualified consumers, which sounds good to me, but it will cost Obama votes... until he mandates they offer cards to questionable borrowers later on.
CC debt is the next big whammy that will hit the economy. A recent newspaper article indicated that the average household has $33,000 in cc debt. For other like ours that have less than $500, there must be some with $60 – 70,000. No job, no income, no payments, more charging.... the other shoe is yet to drop.
I have heard that banks are railing against t his bill stating that this would make getting credit harder for most Americans. I must say that it may be a very good thing if a lot of us have a harder time getting credit. I think credit is given away too easily these days to a lot of folks who should not have it. This is a huge reason we are in the state we are in now, credit became too easy to obtain due to the greed of the banking industry and Americans somewhat unwittingly became the cause of financial ruin in America due to their own greed and inability to restrain their desires of more, more, more.
Lets make credit harder to gain again. Lets force Americans to spend wiser and be more mature with their money. This "backfiring" as the banking industry calls it, could ultimately be the key to better days in America. Don't they always say that the reward you earn is paid with pain, blood, sweat and tears?
Bravo, Mr. President! And one important reform would be to prohibit credit card companies from reducing or closing credit lines based upon issues in a person's credit report, even if their history with that particular credit card company is flawless.
The credit card companies have worked VERY hard to get Americans to ~depend~ upon their credit lines. Many small businesses - most of whom encounter cyclical revenues - depend on credit cards and credit lines to stay current during slow times. Finding out that a credit line you were depending on is suddenly no longer there, or has been reduced to a fraction of its original size, makes cash flow managment more difficult, and has caused many good companies to have to close their doors.
It's time for the credit card companies to accept that their profits come with the responsibility to be respectful of their customers.
A credit card company should not have the right to change their rates on you whenever they feel like it if you have not violated the agreement. They should also not be able to base their rate and lending decisions on existing customers on other non revolving credit accounts.